To Trust or not to!

What kind of trust you want ?

Julian

THERE IS ALWAYS A BETTER WAY!

Hybrid Discretionary Trut is only used when you are planing to buy CF+ and Neg geared properties.

Otherwise if you are only buying cf+ thn a standard family trust is all you need.

Yes most investors have a trust structure set up for asset protection and the cost varies between 1700 and 2000 this includes the set up of your company as well.

Keep in mind a trust is really only needed if you are planning on buying a lot of properties, if you are only ever going to buy one or two then don’t bother with the trust.

Also do a search of the forum and you will find tons of info about trusts.

Good luck

cheers
Leigh K[]

Carve your own path and lead the way.

Dear Terry,

I have just been looking into the advantages of a family trusts or other type of trusts for property investment. Is this the sort you utilise and how do they work or operate to ones advantage.

I have heard that it is better to have a company set up as the trustee with yourself as the director. This all seems very complicated. Who do you see to set this up?

Looking forward to your reply,

PeterG

Hi All, can someone help…. we purchased properties in both names. From what I read Trust seems to be a better option, so can we now transfer these properties into some type of trust?

Cheers

For the $275 trust deeds, please have a look at
http://www.LawCentral.com.au

They also have a lot of good general info.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi Terry,
In what circumstances we will need many trusts? Why not all in One?

Regards
Julian []

THERE IS ALWAYS A BETTER WAY!

Is not another reason that you can limit the liability to only those assets owned by the entity that gets sued (I’m still unsure as to whether or not they are totally safe – I’ve read conflicting reports).

Also, I think having assets in different entities prevents the ‘millionaire’ land tax that NSW and perhaps other states impose once your land value is at a certain level.

Cheers
Mel

ET

Yes you can still borrow up to 80% or even 95% using a trust. But if you have two trustees, both have to guarrantee the loan. so this is where it hurts your borrowing capacity. You could be saving one person for future loans.

eg the mortgage insurers have a limit of about $1.5mil (for both). If you were joint trustees you could only borrow up to $1.5mil. But if you each had a trust with one individual trustee (or one director of the trustee company), then you would get $1.5mil each = $3mil in borrowing capacity.

Terryw
Discover Home Loans
North Sydney
[email protected]

You have great knowledge Terry…thanks

If You never never ask, you’ll never never know”

We’ve purchased our investment properties in joint names – should have known about trusts earlier. Noel Whittaker had an interesting point on trusts in his recent newsletter:

“Over the last three days I’ve been making speeches at the Brisbane Money Expo and then talking to people afterwards. Every time I attend one of these functions, I’m amazed by the lack of thought that people put into their investment strategies. As I’ve said repeatedly, the first question should not be “what shall I invest in”, but “in whose name shall I invest”.

One couple told me that they’d formed a family trust and then bought an investment property in the trust’s name. They have now sold the property and are facing big capital gains tax bill. When I asked them why they’d used a trust, they were unsure but said they felt it would enable them to distribute the proceeds to their adult children who were on low incomes and receiving a wide range of Government benefits.

They had not taken into account the fact that a distribution by the family trust could wipe out the benefits the children were receiving and also trigger the repayment of a HECS liability if the children had one. It would have been much simpler and cheaper to have bought the property in their own names.”